Indian smartphone market grew only by 1.5% YoY over January-March, but it was one of the few that grew

While Apple lead the premium market in this quarter, Xiaomi lead the budget one

The online channel grew by 9.0% YoY in Q1 2020 due to multiple new launches, attractive discounts, cashback offers, and affordability schemes registering a share of 43.1% (Pixabay)

In its Quarterly Mobile Phone Tracker for January to March, International Data Corporation (IDC) revealed that the Indian smartphone market saw a slow start in 2020 growing only a 1.5% year-on-year (YoY) with 32.5 million units shipped in the first quarter.

However, India is one of the few countries that witnessed some growth and ranks in the top three in that lot. Smartphone shipments in the US dropped by 16% YoY and by 20% in China over January to March this year.

"The online channel grew by 9.0% YoY in Q1 2020 due to multiple new launches, attractive discounts, cashback offers, and affordability schemes registering a share of 43.1%," Upasana Joshi, associate research manager, Client Devices, IDC India, said in a statement.

"On the other hand, offline channel shipments declined by 3.5% YoY, owing to fewer consumer offers, fewer retail walk-ins, and a more aggressive portfolio available on e-Tailer platforms across leading brands," added Joshi.

Budget smartphones continued to drive the market with the average selling price in the quarter ending March was $171 (₹12,942 approx). The sub-$200 segment accounted for 76.2% of overall shipments.

This quarter also saw people showing more interest in mid-range devices (Between $200 and $300) and the market share for this segment grew to 18.2%, growing by 87.4% YoY. the Samsung Galaxy A51, Vivo S1 series and Redmi Note 8 Pro were some of the most sought after phones in this segment.

The mid-premium segment ($300 to less than $500) declined 33% YoY, accounting for just 3.8% of total shipments. Apple continued to rule the premium ($500 and up) segment, with 62.7% market share. In the $700 to less than $1000 segment, shipments doubled with the iPhone 11 alone accounting for 68% of shipments.

The feature phone segment fell further in the first quarter with sales down by 29.4%. However, feature phones still accounted for 41% of the combined mobile phone market.

With 31.2% market share, Xiaomi maintained its significant lead over Vivo (21%), Samsung (15.6%), Realme (13.1%) and Oppo (10.6%). In terms of YoY unit change from Q1 2019 to Q1 2020, Realme was the biggest gainer growing at 119.4% while Xiaomi grew 3.4%.

Samsung was the only vendor whose shipments declined in the first quarter going down by 28.4%.

After months of total lockdown, the home ministry in India has finally permitted factories in green and orange zones to re-open. However, experts say that the Indian mobile market will take months to recover from losses faced due to Covid-19.

"Covid-19 will have a substantial impact on the Indian mobile phone market in 2020, with potential supply chain disruptions and slower-than-expected consumer demand for the next few quarters," Navkendar Singh, research director, Client Devices & IPDS, IDC India, said in a press statement.

IDC predicts that the India mobile phone market will follow a U-shaped recovery beginning in the third quarter of the year. The restricted demand from the first half of the year will gradually shift to the second half and may even trickle into 2021, according to IDC. A revival in consumer demand is expected around the festive quarter of Q4 2020, and brands will need to amplify marketing and promotional activities to make the best of this season.

"In these challenging times, brands must relook at their marketing investments, supporting offline channels with hyperlocal delivery initiatives in key cities and try to make up for the lost ground in the all-important second half of year, under the assumption that normalcy will gradually resume Q3 onwards," Singh added.